Question

suppose the owner of the trawler can sell all the fish caught for $75 per 100 pounds and can hire as many crew members as desired by paying them $450 per week. assuming that the owner of the trawler is interested in maximizing profits, what is the optimal crew size? workers

Answer 1

To maximize profits, the optimal crew size for the trawler owner is zero. Hiring additional crew members is not economically profitable.

Step-by-step explanation:

To determine the optimal crew size for maximizing profits, we need to consider the costs and revenues associated with hiring additional crew members. The owner of the trawler can sell all the fish caught for $75 per 100 pounds and can hire as many crew members as desired by paying them $450 per week.

Let's assume that each crew member can catch 100 pounds of fish per week. Therefore, the additional revenue generated by hiring one more crew member would be $75. However, the cost of hiring that crew member is $450 per week.

To maximize profits, the owner should continue hiring crew members as long as the additional revenue generated is greater than the cost of hiring. Therefore, the optimal crew size can be determined by finding the point where the marginal revenue equals the marginal cost.

In this case, since the additional revenue generated by hiring one more crew member is less than the cost of hiring, it is not economically profitable to hire any additional crew members. Therefore, the optimal crew size is zero.